20 October 2005
Commission reminds retailers: new means new
The Commerce Commission is reminding retailers that they can't sell used goods or demonstration models as new.
The reminder comes after the Commission reached a settlement with Smiths City (Southern) Limited in relation to a
second-hand computer sold as a new computer by its retail branch, Powerstore, in Blenheim.
"The Fair Trading Act is very clear on this point," the Commission's Director of Fair Trading Deborah Battell.
"Retailers must accurately convey the condition or history of the goods being sold."
"If it's sold as new, it needs to be new," said Ms Battell. "If the goods have been used for promotional purposes, or
sold and returned, that needs to be spelled out to the customer."
Ms Battell said that retailers needed good tracking systems to keep track of used or ex-demonstration goods and stop
them being sold as new.
Smiths City has agreed to change its systems to keep better track of demonstration models and returned goods.
Background
Powerstore, owned by Smiths City, sold a computer to a customer in May 2003. The customer was unable to connect to the
internet; Powerstore attempted to fix the computer but when the customer was still unable to connect to the internet,
she returned the machine and received a replacement.
In May 2004, a second customer bought what she believed was a new computer from Powerstore in Blenheim. She also had
problems connecting to the internet and returned the computer to Powerstore, who sent the computer away to be repaired.
When the machine was returned the customer attempted to access Outlook Express, only to find emails addressed to the
original purchaser.
The second purchaser managed to contact the original purchaser, who confirmed they had bought, and returned, a computer
from Powerstore in Blenheim.
The second purchaser complained to Powerstore that she had been supplied with a second-hand computer and she was still
having problems with it. Powerstore arranged for the computer to be collected and replaced with a new one, and has
entered into a confidential settlement with the purchaser.
ENDS